Demand for durable and non-durable goods.

 Theory of Demand.

Demand for durable goods and non-durable goods.

Durable goods :- these goods are not quickly ware out and they can be consumed more than once and can yield utility over a period of time.

There are 3 types of durable goods
Durable Consumers goods these can be consumed more than once in final consumption.ex:- bikes, Televisions, computers.
Durable producer goods :- Goods which can be used more than once in production of other good. ex: plant and machinery, Building, 
Semi-durable goods:- Goods which are neither indestructible nor lasting. ex: clothes, rain coats,shoes.

Non-durable goods:-  These goods can not consumed more than once. If once consumed the product is no more useful. They will meet only current demand. 

Non-durable producer goods : Goods which cannot be used more than once in production of other goods. ex: petrol, power.

Non-durable consumer goods : these cannot be consumed more than once in final consumption. ex: ice-cream,milk, vegetables.

FACTORS AFFECTING DEMAND FOR DURABLE CONSUMER GOODS

nature of non-durable goods, their availability in wide varieties, competition among the sellers to acquire and retain customer loyalty.

1) In this case consumer can postpone the replacement or can replace durable goods. It depends upon factors like his social status, prestige, level of money income, rate of obsolescence etc.

2) Greater the current holdings of durable goods greater will be the replacement demand. Hence all factors that determine replacement demand should be considered as determinants of demand for durable goods. 

3) These goods require special facilities for their use e.g. roads for automobiles, and electricity for televisions and radios. 

4) As consumer durables are used by more than one person, the decision to purchase may be influenced by family characteristics like income of the family, size, age distribution and sex composition. 

5) Demand for consumer durables is influenced by their prices and credit facilities available to buy them. 

FACTORS AFFECTING THE DEMAND FOR PRODUCER GOODS 

1) Rate of profitability of user industry and the size of the market of the user industries

2) Data required for estimating demand for producer goods (capital goods) are

     a) growth prospects of the user industries

     b)Norms of consumption of capital goods per unit of installed capacity

3) An increase in the price of substitute factor labour) incimeses the demand for capital goods

4) An increase in the price of a complementary factor decreases the demand for capital,

The factors which encourage the firms to invest in producer goods.

 a) Firms are optimistic about selling a higher output in future

b) Advanced technology with higher efficiency, reduced cost and high productivity of capital

e) Higher profit making prospects of firms.

d) Lower intrest rates.





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